Young Kiwis rely on their parents for financial know-how

What are the risks?

If you have children or close family members in their 20s, are you aware you could be their main source of financial information? That’s the case for nearly half of 20-year-olds today in New Zealand, a recent study by Massey University has found.

Massey University's Fin-Ed Centre is undertaking a 20-year study on the financial knowledge, attitudes and behaviours of a group of New Zealanders through different life stages. They recently carried out a second phase of the study, interviewing participants that were aged 23 to 27 years old.

Nearly half the participants said they had learned “everything” or “almost everything” from their parents. This reliance on parental advice is surprising, given only 35 per cent said they believed their parents knew what was best for them in terms of their finances.

Fin-Ed Centre director Pushpa Wood said relying on parents and life experience had its risks.

“It seems that young Kiwis still avoid formal financial education or consulting financial experts,” Dr Wood says. “Relying on parents and taking a learning-by-doing approach to money management has some obvious risks, especially if parents are not financially knowledgeable, or if bad decisions lead to costly mistakes that are hard to reverse.”

Here are some of the key findings from the study

  • At 89%, participants have a very high participation rate in KiwiSaver;
  • More than 90% know where their money is spent;
  • 65% budget and track spending;
  • 60% wished they were better at saving;
  • 67% think it’s better to dip into savings than use credit for purchases;
  • Only 30% considered long-term planning beyond 5 years;
  • 72% still have a student loan to pay off;
  • Impulse spending is a key problem;
  • Females scored an average of 54% on the financial literacy test while males scored an average of 70%;

These findings can help you start the conversation. Are your children in KiwiSaver? Do they have a plan for buying their first home? Do they have a credit card and do they use it wisely?

As parents, we all want what’s best for our children. This sometimes includes hoping they won’t make the same mistakes we made. And how we manage our finances should be something that’s openly discussed. Do we know how to help our children get the financial education they need?

We have put together a free guide on being smart with money in your 20s. It covers subjects like budgeting, saving, KiwiSaver and first homes (all good things!). Please feel free to forward this on to the people in your life that could benefit from it.


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